Challenges Before Unions and Their Leaders

Challenges Before Unions and Their Leaders

I have been asked to speak on Challenges Before Unions and Their Leaders. While I have not been part of unions, I have had the opportunity to examine the work they do upfront due to my close association of many years with workmen and unions. I reckon that you have all held several positions in unions and would definitely have vast experience and strong views on this subject.

However, it is likely that we would have different perspectives and viewpoints on this subject. Only when we examine and reflect on a subject from multiple and very different points of view that we can plumb its depths. God has given us two eyes with some space between them in order to enable to view things from different angles. It gives understanding of the depth. If you don’t believe me, look at an object with one eye closed, you won’t be able to fathom the depth.

The essence of my speech is that creating an organization with the right culture in this information age, building a positive image for unions discarding the current negative one, developing workmen-centric program for unions and leading industrial relations with a collaborative and partnering approach are the key challenges before the unions today.

[Note: I was invited by Shramik Ekta Mahasangh, which is a Federation of over one hundred unions in Pune industrial belt, to put forth my views in their workshop held on Aug 7, 2018. The original speech was in Marathi. Those who wish to read it can access it here: कामगार संघटनांचे नेतृत्व आणि आव्हाने . I am grateful to Ms Sujata Deshmukh, CEO of OD Alternatives, who helped me run an exercise for the participants. She also enthusiastically translated the Marathi speech in English.]

I began my career in 1973, at a time where there was a lot of tension and strife in the industrial sector. Inflation was galloping with around 12-15% increase in cost of living year on year. In Marathi we refer it as “Mahagai cha bhasmasur” which loosely translates to people finding inflation to be demonic in its ferocity, making it very difficult to subsist with one’s income.

During the early days of my career, strikes were commonplace and would stretch out for long periods of time. The environment was one of violence and strained relations between management and workmen/ unions. Incidents of cooperation between union and management were few and far between. Labor courts were very busy and teeming with activity, with new cases pouring in for litigation almost every day.

Forty-five years later the situation has drastically and diametrically changed. Inflation has come down to around 6% and it is no longer seen as a frightening and insurmountable challenge. Industrial violence and related incidents are sporadic. One wonders if lawyers who used to practice in the exclusively in labor court by taking up cases on behalf of unions or management would be able to generate enough income to subsist.

However, there are some differences. In the past industrial relations were full of tension and strife and unions were able to match management in their strength, could stand up and take management head on. Now helplessness is writ large.

Today there is no question of working toward co-operation between managements and the unions. Because in several organizations the dominance of managements is near total, though you may discover sporadic exceptions. But it is my understanding that the overall situation is what I have mentioned.

These are radical changes, and the most important factor responsible for such drastic change is the globalization of economy. The effects of globalization are well known yet I must mention two for the purpose of our discussion.

One of them is a paradigm shift; it is the realization that management and unions are not adversaries of each other. The real adversary is global competition. For instance, when Walmart decided to set up a base in India, you would recall the kind of articles and comments you read in the newspapers and the frenzied reactions that followed.

The second big shift has been the transformation that organizations have undergone. Here is a metaphor that will illustrate what I mean. Organizations in the previous era operated like how people built their houses, building and adding floors as they gathered resources. They old was retained and something new was added. Today’s organizations are like coconut trees, shedding pinnate leaves – discarding whatever holds no utility value and is outdated while growing taller. This is how several jobs were lost, factories shut. Whether you like it or not, you cannot ignore this trend.

The Industrial Relations Scenario at the National Level

What is the purpose of launching Make in India? The purpose is to encourage organizations, Indian as well as MNCs, to manufacture their products in India. Make in India’s success will see jobs at the high end of technology as well as at the lower end by promoting ancillary industries. Obviously doing so will lead to economic growth, it will create more employment, and it will, in turn, lead to social progress and prosperity. In other words, it must help us lead to our well-being. The catch word is ‘well-being.’

You will appreciate that Make in India must finally deliver a better life or well-being to people, it must satisfy aspirations of people otherwise we must regard Make in India initiative as a failure. In order to fulfil this objective, the Government of India must get foreign direct investment so that more employment can be created. But the FDI comes if you are competitive.

Under these circumstances the Governments come under pressure to lower labour standards as well as wages so that the investments are attractive. Now you will appreciate how schemes like NEEM, Yashasvi, Earn and Learn get the nod of the Government. But doing so defeats the entire purpose which is to improve standard of living and well-being of people. The Government has to do this rope balancing.

I had touched upon the subject of globalization at the beginning of my speech, it has now taken a U turn. The policies espoused by Trump, Brexit and so on will lead to increase in costs and retarded growth of the economy. We are experiencing de-globalization.

Let us bring our attention back to the Indian economy. In Nov 2016 there was a news item that L&T would reduce their workforce by 14000 people. Their CFO was quoted saying that “in order to remain competitive we have embarked on a big drive toward digitization. We will now need only 5 people to complete tasks that 10 people were working on earlier. The CEO of Raymond, Sanjay Behel was quoted saying that “we will use modern technology to reduce around 10000 jobs”.

The kind of impact that AI and Machine Learning technologies will have on industrialization has been the focus of a lot of debates and articles. This would lead to drop in wage levels for people, demand for workforce will start reduce and there would reduction in wages. Some people even assert that wages may drop well below minimum wage levels.

We need to take note of two aspects related to wage levels. Firstly, if productivity increases by 5%, the real wage actually increases only by 1%. This is the trend seen for the period of 8 years between 1999 and 2007 and there appears to be no change in the trend post that. I would not be incorrect in concluding therefore that even though productivity has increased, workmen have not gained anything significant in their income.

Economic growth and economic development are two different things. If the GDP has increased then economic growth takes place and if Human Development Index has improved then real economic development can take place. Our HDI has actually shown a decline (2018 report), this is so apparent that this can be easily understood by everyone including school boys.

The second aspect of wages is that of widening differential in wages of the CEO of the company and the unskilled workman. There are many studies on what should be the multiple between the two. Peter Drucker suggests that it be 20 times (20X). Switzerland failed to pass a law stipulating the multiple be 12 times (12x). In India the Bhoothalingam committee recommended it to be 16 times which did not really cut ice with anyone.

Currently CEO’s pay is five hundred times that of his worker; let him earn it but what about workers’ wages? Not much change!! It means that the benefit of the globalization, the icing on the cake is usurped by one class of employees.

I remember an incident. When a certain industrialist constructed a factory, his manager proposed certain wage levels for the workers before commissioning it. The industrialist said, “Perhaps others are paying such low wages to their workers. But we must offer such pay which will enable our workers to live with respect.” I do not think the industrialists think this way to day. They are after all the prisoners of a system. The real question is whether labour leaders like you think like him: Can pay given to the workers help them live with respect?

It was important for us to consider this larger context for us because we are discussing leadership of unions.

Now let us turn our attention toward labour laws. Everybody is shouting hoarse that the labour laws are outdated. And yes, it is true. But the more important thing to note is that it is not easy to do business here. Our businessmen say that it much easier to conduct business outside India. The British have left behind a legacy of bureaucracy and red-tape which makes obtaining dozens of licenses an arduous task.

Arun Maira, a respected thinker and management consultant says that labour laws do not rank amongst the top three obstacles to economic growth. Surveys conducted by industry associations, consulting firms and government committees have repeatedly pointed to this conclusion. The real hurdle is the lack of ease of doing business.

Victim of One’s Own Image

There are several challenges facing Unions today starting with how they are perceived by most people. Our natural state/ Indian culture is about being connected, co-operative and helpful. However political interests have led to unions being utilized for vested interests and then forgotten by the very same politicians. This has led to unions getting a bad image. Let us take the example of Majur Mahajan Union which was considered to be an ideal union. We were actually given a study tour of their office while we were in college to learn about them. Today we hear and read various derogatory allegations against this union.

Barring a few unions in Mumbai, most unions have operated like ‘shop.’ On their part most workmen tend to change their allegiance to union every three years or so. Such unions were one-man-shows which did not have concrete program focusing on interests of workers. They did not have a proper set up which could be called ‘organization.’ Such one-man-shows may have obtained some benefits for the workers, but did they get anything for them which brought in long term benefits? Nothing! Just like there is no requisite qualification to be a political leader, there is no requisite qualification to be a union leader too. They are just two sides of the same coin. Such leaders have only caused damage to the labour movement.

Maharashtra has a rich tradition of creating a world out of a void. Dr Baba Amte, Datta Iswalkar are some of the names that come to mind. In my opinion, Iswalkar’s pioneering work has no parallel. A mill worker, Iswalkar, managed to provide housing to twenty thousand workers! His achievement is beyond compare and should be studied by every union leader for inspiration. You cannot find any leader who could match his ability to organize people, create a focused program and ensure it gets executed. He countered the political leaders, wealthy builders, and filthy rich mill owners. Twenty thousand workers got housing because of him and a lakh and half mill workers will eventually get housing due to his efforts.

We have a similar leader amongst us – Arvind Shrouti. He cannot be called a union leader in a true sense because he is actually an advisor and consultant. Unfortunately, his unique work and contribution has not received due recognition, otherwise he would and should have been conferred an award like Magsaysay by now.

How do leaders emerge?

How did Datta Iswalkar, Dr Baba Amte, Dr Abhay Bang, Dr Bavaskar create such a significant impact through their leadership? Union leaders who wish to make such impact should think about this aspect. There may be many factors that drive leaders to create impact – however I feel that it is their passion and zest for a cause or a point of view that makes the difference.

It is when you feel something is not right and you get restless about it. This compels you to act. It is when you have a burning desire to do something that you get out of inertia and change the status quo. My question to you is which worker-centred challenges is a priority or focus for you? And are you ready to declare your intentions boldly to the world to attack it? If you are not ready to announce it, can you really expect workmen to follow you and stand by you?

There is a big difference between leadership in a corporate and leadership of unions

I believe leading a Union is a really challenging task. Managers within a corporate are given training and skill building around leadership effectiveness. However, there is a difference between being a leader in the corporate world and being a leader of a workmen’s Union. In the corporate set-up there is no question of not following directives, the hierarchy ensures that everyone falls in line.

However, that is not the case in a union. If workmen do not find the Union leadership to be relevant or effective, they are free to find someone else who can meet their requirements. Which means that union leaders have to somehow engage and keep their workmen aligned to their leadership and guidance. Recourse to authority or power is not the solution in the long run.

Who are your members? What do they want? Use data to make a point…

It is for this reason that union leaders must articulate and enroll workmen to their vision. In this information age it is possible to reach out, even if you have seventeen thousand members, with the use of modern technology, WhatsApp and email. It is easy to remain connected to people. Will the old techniques work if you have to build a modern union? In the modern world you have to substantiate your point of view/ decisions with data. I once visited an office and found a board which read “In God we trust, everyone else must come with data.”

I am not aware of the kind of data as a Federation you have about your members. But if you did not have data to back your actions you will not be able to influence anybody – that includes workers too. You have to be alive to this reality.

This is why Arvind Shrouti often talks about creating Union Information System. Leaders ought to know how much an average worker earns, his educational qualifications, whether he works in a permanent job or as a contract worker, his age and the burning issues before him. All this information must be available to the officers of your union. Your initiatives and programs must be built on the basis of such information. In this age of technology, data must be put to good use.

Do workers or unions matter in the corridors of power?

Earlier in my speech I have alluded to the fact that the kind of hold and power that union leaders have today do not match what they had earlier. Earlier political leaders took up leadership of unions, today it is imperative for the union leaders to find a seat in the Vidhan Sabha and Lok Sabha. I believe that the interests of labour are not adequately represented there today. Thousands of workers are getting exploited mercilessly in the schemes like NEEM, Earn and Learn, and the insidious practice of contract labour. You surely are aware of this precarious situation; why are we not seeing any action on these issues?

I recently met the Union leader of an MNC organization. He told me that he was given a permanent job after working 16 years as a temporary hand. Sixteen prime years of youth eroded by in uncertainty of life. This is the time, he said he got married, raised a family, put his children to school, all with the Damocles’ sword of loss of job. Sixteen years as a temporary hand!! Do you think it is fair? Is it something that we can go through with a sense of respect and pride? This is not a unique case – there are thousands who have met with the same fate – I know it and you too know it very well. Should we not find a solution to this situation?

This is the time to change the laws, this is the time to change the ‘system’ of managing labour. There is nothing permanent in this world. Neither organizations nor jobs are permanent. We must accept this reality, and find a solution which takes in to account the issues of dignified living and concerns of businesses. Blind opposition to changes in laws in not going to serve any purpose.

Think Cooperation Not Conflict

The issues before the businesses in this age are different, they must adopt to the changes in economic scenario quickly. To enable them achieve this, it is necessary to change laws suitably. And so also paradigm shift in the labour leaders’ approach to industrial relations.

We need to think cooperation and not conflict if we have to establish a new order of industrial relations. Pune industrial belt has made an excellent beginning to establish it. You know about the path breaking settlement in ASAL [Automotive Stampings & Assemblies Ltd.]. Its success is rooted in cooperation, not in conflict. The workers got substantial rise in wages although the company had piled up accumulated losses for the last seven years.

Let me remind you: The essence of my speech is that creating an organization with the right culture in this information age, building a positive image for unions discarding the current negative one, developing workmen-centric program for unions and leading industrial relations with a collaborative and partnering approach are the key challenges before the unions today.

Unions have become outdated, and managements have never wanted to welcome/ encourage them. I wonder if today even workmen are showing allegiance to them. I am not referring to unions in Pune, I am talking about unions across India. Raymond shut down, GSK shut down. Take a look at Thane Belapur road – it used to have a row of factories – is any factory operational there? How did this happen without a voice of protest? It happens so because of the helplessness and obsolescence of unions.

Will unions rise again from the ashes like the Phoenix? That’s a million-dollar question. There is no easy answer to this question but we must search it. There is no other alternative but for unions and their leaders to seek these answers and in doing so move in the right direction toward the future.

Vivek Patwardhan